Oil slips for third session on US rates likely ‘higher for longer’.

Oil prices fell for a third straight session on Wednesday on expectations that the Federal Reserve could keep US interest rates higher due to sustained inflation that could impact fuel consumption in the world’s biggest oil consumer. world, reports News.Az, citing Reuters.

Brent crude futures were down 60 cents, or 0.7 percent, at $82.28 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were down 64 cents, or 0.8 % to $78.02 at 03:46 GMT on Wednesday.

Oil prices fell about 1 percent on Tuesday.

Fed policymakers said on Tuesday that the US central bank should wait a few more months to ensure that inflation is indeed back on track to its 2% target before cutting interest rates.

Higher borrowing costs may slow economic growth and depress oil demand.
U.S. crude and gasoline inventories rose last week, while distillates fell, according to market sources citing Tuesday data from the American Petroleum Institute (API).

Ahead of this weekend’s Memorial Day holiday, which kicks off the US summer peak season, retail gasoline prices fell for a fourth straight week. US prices for diesel, a key refined product for both the industrial and transportation sectors, also fell.

Investors await minutes from the Fed’s latest policy meeting and weekly US oil inventory data from the US Energy Information Administration (EIA) due on Wednesday.

“The minutes of the Federal Open Market Committee (FOMC) will be watched for the Fed’s assessment of bumpy first-quarter inflation and indications of the timing and extent of potential rate cuts in 2024,” ANZ analysts said in a note report.

“It’s more of a wait-and-see approach to ‘what the data tells us’,” ANZ said.

The euro zone has all but promised a rate cut on June 6 amid a more positive economic outlook. European Central Bank President Christine Lagarde said in an interview broadcast on Tuesday that she is “very confident” that inflation in the euro zone is under control.

News.Az